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Prologis, Blackstone Buying Warehouses? - Analyst Blog

Prologis Inc.
(
PLD
) and
The Blackstone Group L.P.
(
BX
) are said to have struck a deal to acquire a portfolio spanning
17 million square feet of warehouse and distribution centers for
about $960 million, according to a Reuters report. The portfolio,
which is majority owned by Lehman Brothers includes properties in
Reno and Las Vegas, Nevada.

Blackstone would operate approximately 9.5 million square feet of
properties in Reno, while the remaining properties that are
mainly located in Las Vegas and Pennsylvania would be acquired by
Prologis.

It is believed that if the current deal materializes, it would be
accretive to Prologis' bottom line. The company could benefit
from rising rent and occupancy. As a matter of fact, Prologis is
endeavoring to capitalize on its global prospects.

With growth in e-Commerce, there is a rising demand for Class-A
facilities and the company stands to benefit as it has the
capacity to offer modern distribution facilities in strategic
infill locations. Moreover, leasing decisions that were earlier
postponed due to volatility in the markets are gradually coming
off the shelf.

Its build-to-suit deal in the first quarter with end-to-end
e-Commerce service provider SpeedFC, a subsidiary of
Navarre Corp.
(
NAVR
) and the transaction with Chinese logistics provider, Deppon are
expected to contribute meaningfully to the company's top line.

Last month, Prologis reported first quarter 2013 core FFO (funds
from operations) per share of 40 cents, in line with the Zacks
Consensus Estimate and the prior-year quarter figure. Results
reflect decent revenues in the reported quarter, and completion
of the Japan-REIT IPO as well as the European joint venture.
Moreover, its strategic measures have helped lower its overall
debt level.

Prologis currently holds a Zacks Rank #3 (Hold). Another REIT
stocks that is performing well and deserves a look is
DCT Industrial Trust Inc.
(
DCT
), which carries a Zacks Rank #2.

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